1:00PM New York, 6:00PM London- U.K. manufacturing output prices rose 5% on the year in December.

U.K. stocks advanced on home builders after Balfour Beatty announced that its full year earnings were at the top end of the analyst expectations as demand for construction and engineering services soared.

In London trading FTSE 100 rose 0.22% or 13.7 to 6,215.70.

Of the 102 FTSE stocks 67 gained and and 35 declined.

Hammerson Plc led advancers with a rise of 9.27% spurred by positive outlook in the construction sector. Taylor Wimpey gained 3.73%.

The Office of National Statistics reported on its website site today that the output annual inflation for all manufactured products rose 5% in December, while input price annual inflation climbed from 10.9% in November to 11.3% in December.

Month-on-month output prices measure for all manufactured products surged 0.5% buoyed by rises in petrol and food products.

Also the “narrow” output prices showed an annual increase of 2.5%, with the seasonally adjusted measure soaring 0.4% between November and December.

According to the ONS, the input prices measure of U.K. manufacturers’ materials and fuels increased 1.0% as prices of home produced food products and imported parts gained as well, while on a seasonally adjusted basis the index edged up 0.5% between November and December.

Furthermore, the “narrow” input prices measure rose 3.7% in the year to December and in seasonally adjusted terms the index rose 0.6% between November and December.

The BBC reported today that former Chief Executive of Lloyds Ron Sandler is expected to be appointed by the government to run troubled lender Northern Rock. The news fueled the speculation that Northern Rock may be nationalized.

However, Bloomberg news quoted Prime Minister Gordon Brown’s spokeswoman Michael Ellam saying the government will keep its options open. Ellam said, “We have always made it clear that, in terms of Northern Rock’s future, all options are on the table, including nationalization.”

Shareholders of the bank will vote tomorrow at an extraordinary meeting in Newcastle on a proposal that requires shareholder approval prior to asset sale.

Of the FTSE 100 index shares Hammerson led advancers with a rise of 9.27% followed by gains in Persimmon of 6.87%, in Liberty International Plc of 6.45%, in British Land Corporation of 5.06%, and in Enterprise Inns of 4.51%.

Imperial Tobacco led decliners of the FTSE stocks with a drop of 3.92% followed by losses in London Stock Exchange of 3.41%, in Shire Plc of 3.22%, in Wolseley Plc of 2.50%, and in Cable & Wireless of 2.31%.

Other retailers also slumped on speculation that consumer spending is easing. Sainsbury fell 1.49% and Tesco lost 1.41%.

JJB Sports Plc announced today in a trading update on its Web site that the company had lowered its forecasts for second half pretax profits after cutting prices by 90% in December and January to clear slow moving merchandise.

Second half pretax is expected to be fractionally lower than 27.4 million pounds profit a year ago.

Sales at the retailer however rose 2.5% in the six weeks ended January 6, while same store revenue increased 2.2% in the 23-weeks ended January 6.

Bloomberg news reported today that Thomson Corporation and Reuters Group Plc announced in a Regulatory News Service statement today that the planned purchase of Reuters will be completed in the second quarter when the U.S. Department of Justice and European Commission issue their rulings.